GENERAL RISK DISCLOSURE. ROBOFOREX (CY) LTD Soboh House 377, 28th October Street Office #1, 3107, Limassol, Cyprus

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1 GENERAL RISK DISCLOSURE ROBOFOREX (CY) LTD

2 GENERAL RISK DISCLOSURE INTRODUCTION RoboForex (CY) Ltd (hereinafter called the Company ) is an Investment Firm regulated by the Cyprus Securities and Exchange Commission (license number 191/13). This notice is provided to you in accordance with the Markets in Financial Instrument Directive (MiFID) of the European Union. RISK NOTICE The Client should not engage in any investment directly or indirectly in Financial Instruments unless he knows and understands the risks involved for each one of the Financial Instruments. So, prior to plying for an account the Client should consider carefully whether investing in a specific Financial Instrument is suitable for him in the light of his circumstances and financial resources. The Client is warned of the following risks: 1. The Company does not and cannot guarantee the initial capital of the Clients portfolio or its value at any time or any money invested in any financial instrument. 2. The Client should acknowledge that, regardless of any information which may be offered by the Company, the value of any investment in Financial Instruments may fluctuate downwards or upwards and it is even probable that the investment may become of no value. 3. The Client should acknowledge that he runs a great risk of incurring losses and damages as a result of the purchase and/or sale of any Financial Instrument and accepts that he is willing to undertake this risk. 4. Information of the previous performance of a Financial Instrument does not guarantee its current and/or future performance. The use of historical data does not constitute a binding or safe forecast as to the corresponding future performance of the Financial Instruments to which the said information refers. 5. The Client is hereby advised that the transactions undertaken through the dealing services of the Company may be of a speculative nature. Large losses may occur in a short period of time, equaling the total of funds deposited with the Execution Venue. 6. Some Financial Instruments may not become immediately liquid as a result e.g. of reduced demand and the Client may not be in a position to sell them or easily obtain information on the value of these Financial Instruments or the extent of the associated risks. 7. When a Financial Instrument is traded in a currency other than the currency of the Client s country of residence, any changes in the exchange rates may have a negative effect on its value, price and performance. 8. A Financial Instrument on foreign markets may entail risks different to the usual risks of the markets in the Client s country of residence. In some cases, these risks may be greater. The prospect of profit or loss from transactions on foreign markets is also affected by exchange rate fluctuations.

3 9. A Derivative Financial Instrument (i.e. option, future, forward, swap, contract for difference) may be a nondelivery spot transaction giving an opportunity to make profit on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument. 10. The value of the Derivative Financial Instrument may be directly affected by the price of the security or any other underlying asset which is the object of the acquisition. 11. The Client must not purchase a Derivative Financial Instrument unless he is willing to undertake the risks of losing entirely all the money which he has invested and also any additional commissions and other expenses incurred. 12. Under certain market conditions it may be difficult or impossible to execute an order. 13. Placing Stop Loss Orders serves to limit your losses. However, under certain market conditions the execution of a Stop Loss Order may be worse than its stipulated price and the realized losses can be larger than expected. 14. Should the Equity of the Client be insufficient to hold current positions open, the Client may be called upon to deposit additional funds at short notice or reduce exposure. Failure to do so within the time required may result in the liquidation of positions at a loss and he will be liable for any resulting deficit. 15. A Bank or Broker through whom the Company deals or the Company itself may act in the same market as you, its own account involvement could be contrary to your interests. 16. The insolvency of the Company or of a Bank or Broker used by the Company to effect its transactions may lead to the Client s positions being closed out against your wishes. 17. The Client s attention is expressly drawn to currencies traded so irregularly or infrequently that it cannot be certain that a price will be quoted at all times or that it may be difficult to effect transactions at a price which may be quoted owing to the absence of a counterparty. 18. Trading on-line, no matter how convenient or efficient, does not necessarily reduce risks associated with currency trading. 19. There is a risk that the Client s trades in Financial Instruments may be or become subject to tax and/or any other duty for example because of changes in legislation or his personal circumstances. The Company does not warrant that no tax and/or any other stamp duty will be payable. The Client should be responsible for any taxes and/or any other duty which may accrue in respect of his trades. 20. Before the Client begins to trade, he should obtain details of all commissions and other charges for which the Client will be liable. If any charges are not expressed in money terms (but for example as a dealing spread), the Client should ask for a written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms. 21. Investing in some Financial Instruments entails the use of gearing or leverage. In considering whether to engage in this form of investment, the Client should be aware that the high degree of gearing or leverage is a particular feature of Derivative Financial Instruments. This stems from the margining system applicable to such

4 trades, which generally involves a comparatively modest deposit or margin in terms of the overall contract value, so that a relatively small movement in the underlying market can have a disproportionately dramatic effect on the Client s trade. If the underlying market movement is in the Client s favor, the client may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of the Clients entire deposit, but may also expose the Client to a large additional loss. In regard to transactions in derivative Financial Instruments with the Execution Venues, a derivative Financial Instrument is a non-delivery spot transaction giving an opportunity to make profit on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument. The Client must not purchase derivative Financial Instrument unless he is willing to undertake the risks of losing entirely all the money which he has invested and also any additional commissions and other expenses incurred. 22. Transactions may not be undertaken on a recognized or designated investment exchange and, accordingly, they may expose the Client to greater risks than exchange transactions. The terms and conditions and trading rules may be established solely by the Execution Venue. The Client may only be able to close an open position of any given contract during the opening hours of the Execution Venue. The Client may also have to close any position with the same counterparty with whom it was originally entered into. In regard to transactions in Financial Instruments with the Company, the Company is using a Trading Platform for transactions in Financial Instruments which does not fall into the definition of a recognized exchange as this is not a Multilateral Trading Facility because the Company may be a in a client transaction. 23. The Company will not provide the Client with investment advice relating to investments or possible transactions in investments or make investment recommendations of any kind. 24. The Execution Venue will be required to hold the Client s money in an account that is segregated from other clients and the Execution Venue s money in accordance with current regulations, but this may not afford complete protection. 25. Currency risk: Profits and losses of transactions with contracts denominated in a foreign currency that differs from the currency of the Client s account are affected by the exchange rate fluctuations when converted from the contract currency to the account currency. 26. Country/Political risk: This is the risk that an international investor bears due to the political conditions of the country he has invested in. Typically, the concern here is the actions of governments, but other vectors of political risk include local legal systems, the military, or state-sponsored groups. Examples of political risks include: The imposition or removal of taxes; The imposition or removal of exchange controls or exchange rate management systems; The repudiation or moratorium of government or central bank debt; The confiscation of assets including nationalization; The imposition or removal of trade quotas or tariffs or both;

5 The passage of legislation making previously acceptable business practices or ownership structures now illegal or subject to censure. 27. Liquidity risk: Liquidity risk arises in situations where a party interested in trading a Financial Instrument cannot do so because nobody in the market wants to trade that particular Financial Instrument. In such a case an investor may not be able to sell a Financial Instrument or close out a position at the market price at any given time. 28. Credit risk: Credit risk refers to the capability of the counterparty to fulfill its contracted financial obligations like dividend payments, interest payments, repayment of principal when due, etc. 29. Interest rate risk: Interest rate risk is the probability of an adverse impact on profitability or asset value as a result of changes in interest rates. Fluctuations of market interest affect the prices of securities. Usually the price of shares increases if the interest rate falls and vice versa. Factors that influence the level of market interest rates include: Expected levels of inflation; General economic conditions; Monetary policy and the stance of the central bank; Foreign exchange market activity; Foreign investor demand for debt securities; Levels of sovereign debt outstanding; Financial and political stability. 30. Operational risk: Operational risk can be defined as the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events. This is the risk that the internal organizational systems of the Company may run due to system malfunctions or human errors. 31. Market risk: This reflects the extent to which the return of a Financial Instrument varies in response to, or in association with, variations in the overall market returns. 32. Electronic trading risk: Electronic trading systems use computer devices for routing orders, balancing operations, registering and clearing transactions. These may be subject to temporary failure and faulty operation. On executing transactions using an electronic trading system, the Client bears the risks specific to such a system, including the risk of a failure in the operation of the hardware or software. Therefore, the Client s order may not be carried out in accordance with his instructions or may not be executed at all. It may be impossible to continually receive information on the positions or to meet margin requirements. This notice cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in all Financial Instrument and investment services. Please refer to the Risk Disclosure for Financial Instruments if you are considering trading with the Company in derivative Financial Instruments.